Monalisa is 35 years old and is drawing a monthly salary of RM4,000.00 in a government department. Her salary is expected to increase at an average rate of 6% per annum until retirement at age 60. In addition, it is assume that she needs 70% of his last drawn salary as first year annual income which shall go up in subsequent year at assumed inflation rate of 3% during retirement. Monalisa will park her retirement fund in an account that generates return of 5%. She is expected to live for another 30 years during retirement. It is assumed that the retirement gratuity will be used to cover some part of the retirement gap.

Required :

1. Calculate the lump sum need based on capital liquidation approach

[4 marks]